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Craft brews cheer 2009, says Boulder trade association report

Industry bucks trend and experiences growth in dollar sales, volume

By Alicia Wallace Camera Business Writer

Posted:
03/09/2010 06:20:23 PM MST

Updated:
03/09/2010 06:42:27 PM MST

Coey Jenkins prepares to draw beer for testing from a fermenting tank at Left Hand Brewing Co. on Tuesday. Left Hand grew in the double-digits last year and this year should be the same story, said Chris Lennert, vice president of operations.
(
MARTY CAIVANO
)

Last year was not the easiest for some in the beer business: Overall sales in the United States were down 2.2 percent and imported beer sales dropped 9.8 percent.

But there weren't tears in every beer, according to a report released Tuesday.

The craft brewing sector -- a populous group of microbreweries and independent regional operations -- recorded a 10.3 percent increase in sales by dollars and a 7.2 percent increase of sales by volume in 2009, according to a report from the Brewers Association, a Boulder-based trade association that represents craft brewers and hosts the annual Great American Beer Festival in Denver.

Last year's performance by 1,508 craft brewers outpaced that of 2008, when 1,459 craft breweries reported increases of 10.1 percent by dollar sales and 5.9 percent by volume sales. Craft breweries also gained a little more market share to 6.9 percent in dollar sales and 4.3 percent in volume sales, the association said.

"In the industry, it does feel like a shift is definitely happening as people are more interested in beer from small, independent brewers," said Paul Gatza, executive director of the Brewers Association.

That could be a good trend for Colorado, which has a brewery for every 48,000 residents.

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Consumers appear to be eschewing recession-caused spending trends and not only continuing to buy craft beer, but also seeking out specialty items from brewers, Gatza said. Sales of seasonal beers grew 25 percent last year, he said.

Avery Brewing's sales were up 4 percent -- a dramatic drop from eight straight years of growth in the 20 percent to 40 percent range, he said.

Perhaps the brewery's attention to the unique brews had an impact when consumers looked to spend less, Avery speculated, adding that he considers 2009 to be a "blip." He's already seeing indications of a turnaround.

"I think we've turned the corner," he said.

During the first two months of the year, sales were up in the 35-percent-to-45-percent-range compared to the same time last year, he said. Avery's optimism for 2010 also is boosted by plans to sharpen up the branding and labeling and also release some of its beers in cans.

The cans have been good for Longmont-based Oskar Blues Brewery, which reported a sales increase of 145 percent in 2009, said Chad Melis, a spokesman for the brewery. However, the company that touts the "canned beer revolution" also saw some success outside of the aluminum lining.

Oskar Blues opened a new restaurant at the southern edge of Longmont last year and bucked some reports that people are eating out less, Melis said.

"It remains busy ... part of it is the new beer drinker, the new culture of craft beer we're trying to push," he said, noting the more than 40 beers on tap.

Fellow Longmont brewery Left Hand Brewing Co. also has high hopes for 2010, said Chris Lennert, vice president of operations.

Left Hand grew in the double-digits last year and this year should be the same story, he said.

What have changed are the company's plans to not expand into new markets, but rather focus on existing markets in 29 states. Left Hand also plans to rebrand and relabel the beers.

"We just figured it was time for us to give ourselves an update," Lennert said of the brewery founded in 1994.

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